Foreclosures back to normal

Monday

Oct 25, 2010 at 12:34 AM

By RICHARD PRIOR

Concerns about suspected problems with foreclosure documents created a flurry of activity recently, but foreclosure proceedings in St. Johns County Circuit Court are cranking up again now that major banks have laid those concerns to rest.

Settling all those foreclosures may be good news for an economy struggling to recover. But it's the worst possible news for people about to be thrown out of their homes.

"I believe a substantial number of (foreclosures) are going to be homesteads," said St. Johns Circuit Judge J. Michael Traynor. "In the first (wave) of foreclosures, there were a lot of investors, renters and speculators.

"In this group there may be more homeowners. They've been trying longer, harder to hold onto their homes."

The self-imposed timeout by mortgage lenders "did affect the number of cancellations of sales," Traynor said this week. "It also substantially increased the number of cancellations of summary judgment hearings."

A summary judgment is a court's decision, made without a full trial.

The judge said that one day last week, he received 19 cancellations of sales that had been scheduled.

"They weren't all scheduled for the same day, but I had all those cancellations on one day," said Traynor, who handles local foreclosures with an assist from senior judges.

One day recently, the number of requests for cancelled hearings was just over 28 percent of the cases filed, he said; a few days later, it hit 43 percent.

He said he expects the number of cancellations to be closer to the high number, at least in the short term.

Bank of America, GMAC and JPMorgan Chase were among the largest mortgage lenders to announce two weeks ago that they were suspending foreclosures because of suspected improprieties in the process.

According to several news services, some lenders' employees got around the problem of missing documents by swearing falsely that they had "personal knowledge" of certain cases.

Employees with other firms allegedly didn't read many of the papers they attested to and filed false documents, news services reported.

Bank of America reported after its 16-day moratorium that it found no problems with any foreclosure documents and would resume the process.

"Lifting the moratorium will probably get the paperwork back in the pile, in the process," said Traynor. "In my opinion, (lenders and attorneys) are now pursuing final judgments and foreclosures.

"That will put the numbers back where they were previously. That's assuming they get their paperwork in order."

In trying to ensure the legality of the process, judges "look for the documents that support (the mortgage holder's) claim," said Traynor. "If the documents necessary for the foreclosure are there, and nobody challenges the authenticity of those documents, it's hard for a judge to question them."

There were about 3,200 local foreclosures last year. That number is down by about 300 cases through the end of September, the judge said.

"What has started to increase is the number of commercial foreclosures," he said. "Proportionately, there are not many of them compared to residential. But they will require more time because of multiple attorneys, multiple hearings."

In a process that has seemed to have no end, Traynor still sees no light at the end of the foreclosure tunnel.

"I don't see any immediate end to this, given the current state of the economy and the state of the loans that are being foreclosed," he said. "I hope the economy turns around as soon as possible for the sake of the people who are trying to save their homes.

"In the past, we saw homes that were bought for speculation or investments. Now we're seeing an awful lot of people who are dealing with the loss of their homesteads. Families having to pick up and locate. Children changing schools.

"It's truly a sad situation."

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